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In an effort to evaluate performance and as a follow up to our YouTube, we compare how the quarter measured up to previous management commentary and guidance

OVERALL

  • GOOD AND BAD:  Q4 was a big miss from consensus although relative to our estimates Borgata was the only real negative standout.  Guidance was also weak.  However, BYD made a big move in selling Echelon:  improves the balance sheet, removes the big overhang of a restart of that expensive project, and eliminates $16m in ongoing costs

WHOLLY-OWNED EBITDA

  • WORSE:  Ex Peninsula, wholly-owned EBITDA post corporate expense came in at $65.7MM.
  • PREVIOUSLY: "We expect wholly-owned EBITDA after the deduction for corporate expense to be in the range of $70 million to $75 million."

LV LOCALS TRENDS

  • SLIGHTLY BETTER:  Promotional environment has stablized.  BYD saw an improvement in trends starting in December and it has continued into 1Q.  Customer count is up; spend per visitor is down.  The higher end of database continue to do well.
  • PREVIOUSLY: "I wouldn't say that promotions have abated. I think they're at very much kind of the same state they were in through the summer. What we have seen is spend per visitor in the Las Vegas Locals segment flatten out."

MIDWEST AND SOUTH REGION

  • WORSE:  Visitiation and spend per visit were lower in the casual gamer segment.  The market remains very competitive.
  • PREVIOUSLY:  "Our Midwest and South region...is currently the healthiest region of the domestic gaming industry and the most robust part of our business."

ATLANTIC CITY

  • WORSE:  Sandy really hit AC hard with EBITDA falling 63% in 4Q.  Guidance was also well below the Street for Q1.
  • PREVIOUSLY:
    • "Atlantic City.... the... environment remains competitive. Weakness was concentrated in our table games business, where both volume and hold fell year-over-year. This accounted for almost the entire EBITDA shortfall. Still, there were encouraging signs as our slot and non-gaming business showed growth. Borgata remains the undisputed market leader and we expect it will be Atlantic City's premier destination resort for years to come."
    • "Revel spent a lot of marketing dollars, they were very aggressive in buying business, in trying to gain trial and gain some traction. We increased our promotional dollars slightly. If you look at some of our slot promotional credits, they're up slightly year-over-year, but not substantially, and not compared to what the rest of the market is doing."

DOWNTOWN

  • WORSE:  4Q revenues fell 2% YoY while EBITDA dropped 8% YoY, even though BYD gained 250bps in market share.  
  • PREVIOUSLY: "As expected, we saw growth resume in our Downtown business segment in the third quarter and we anticipate this positive trend will continue in the fourth."

LV LOCALS: PENNY DENOMINATION GAMES

  • SAME:  Introduced 1,000 new penny slot games in 4Q
  • PREVIOUSLY: "The Las Vegas Locals business remains extremely competitive...we're continuing our efforts to grow business from casual players. Penny denomination games are popular with these guests and are one of the few segments of the Locals market to show growth in recent months. So we've recently taken steps to ensure we are well positioned in this area and are nearing completion of the rollout of some 1,500 new penny themes across our Southern Nevada properties. Starting today we have begun to aggressively promote these new games. While we believe this initiative will be attractive to slot players, video poker will remain an essential part of our business, especially among our core players. We will continue to offer our guests what we believe is the most competitive video poker product in Las Vegas."

LOUISIANA/MISSISSIPPI

  • WORSE:  BYD took a impairment writedown of $17.5MM on its Shreveport facility.  Their 'best' property, Delta Downs grew 2% in state-reported gaming revenues in 4Q.
  • PREVIOUSLY: "We know that in certain markets like Tunica, Mississippi and Shreveport, Louisiana, there is a significant amount of competition both within the specific geographic market as well as within neighboring states. But I've got to tell you, I feel awfully good as to where we perform in those markets relative to our competitors that post those results. And you can see it in the revenue numbers that are published especially in Louisiana as it relates to Sam's Town Shreveport."